October orders of heavy-duty trucks were down a staggering 51% from the same month last year and hit a three-year low, according to the most recent data from FTR Transportation Intelligence.
October is typically the biggest month for new truck orders and ACT Research Vice President Steve Tam said we’re currently seeing the biggest volume change in nearly four years and the biggest price drop in three years as the sector has been in recession since the start of 2019.
The recession is forcing major layoffs at Cummins, the biggest producer of Class 8 truck engines with a 38% market share last year over competitors like Daimler and Volvo/Mack, and $23.8 billion in revenue.
According to Business Insider, Cummins representative Jon Mills said the company will have to lay off about 2,000 of its 62,610 workforce because of the downturn drivers like Chad Boblett recently called a “bloodbath” in the industry.
“As we communicated to our employees last week, demand has deteriorated even faster than expected, and we need to adjust to reduce costs,” Mills said.
Cummins told shareholders last week it plans to increase profitability amid the trucking recession by continuing investments in fuel-cell and hydrogen-production tech, and that structural costs will be cut by $250 million.
“Unfortunately, we must do more to reduce costs because the downturn is happening at a sharper pace than we experienced in the previous two cycles,” he said.
“We understand this is incredibly difficult for those directly impacted and for all employees across the company. Our employees are important to the success of our company and necessary actions like this are incredibly tough and disappointing. However, by taking actions now, we can navigate this downturn and emerge stronger when markets return just as we have done in the past.”
According to Business Insider, thousands of truckers have lost their jobs and about 640 trucking companies have gone out of business in 2019, more than triple last year’s 175, so clearly the economy isn’t working for everyone.